Oil prices, investors await the outcome of the US-Iran nuclear talks, which could provide a quick supply of crude oil to global markets. Prices fell on Thursday after recovering from an unexpected drop in US crude inventories in the previous session.
Brent crude futures fell 7 cents, or 0.1%, to $91.48 a barrel at 0425 GMT, while West Texas Intermediate (WTI) crude fell 4 cents to $89.62 a barrel.
Inventories at major fuel centers around the world are at several-year lows. The global oil supply needs to be kept under control while the strong recovery after the demand destruction caused by the coronavirus pandemic is watched with sensitivity.
U.S. crude oil commercial inventories fell 4.8 million barrels in the week ending Feb. 4 to 414.4 million barrels, at the lowest level since October 2018, the Energy Information Administration (EIA) said. However, analysts had predicted an increase of 369,000 barrels.
According to EIA data, US product in supply has reached 21.9 million barrels per day (bpd) in the past four weeks due to strong economic activity across the country.
Investors are closely watching the outcome of the US-Iran nuclear talks that resumed this week. A deal could lift US sanctions on Iranian oil and reduce global supply tightness.
The US-Iran nuclear negotiations have reached a critical point. The White House has stepped up the pressure on Iran, saying it would be impossible to return to the 2015 deal if a deal is not reached within a few weeks. The fundamental uncertainty about whether Iran is willing to reach an agreement at this point continues.
Some positive comments by diplomats on Russia and Ukraine concerns give positive signals that the parties are approaching an agreement. A quick settlement will likely put some more downward pressure on prices as it will help alleviate some concerns about the lack of spare OPEC capacity.
US Vice President Kamala Harris will meet with allies and partners in Munich next week to discuss the alarming situation in Ukraine and Russia.
Separate news took place between the United States and Saudi Arabia. Biden and Salman discussed energy resources and developments in the Middle East, including Iran and Yemen, in a phone call on Wednesday. The need to maintain balance and stability in the oil markets and to maintain the OPEC+ supply agreement was underlined.